Cultivating Community with Ashley Stiles

Welcome. This is the Insider's Edge to Real Estate Investing with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program you'll learn game changing strategies to outperform the market. James will teach you how to source, execute and capitalize on the best real estate opportunities in New York and around the world.

Now here's your host.

Welcome to episode number 184, the Insider's Edge to Real Estate Investing. This is your host, James Nelson and special treat today with us we have Alexander Marolda. Alex is a senior Associate director here at Avis and Young. We've worked side by side for several years and Alex had actually moderated a panel at Girl Gang. For all you female listeners, check out Girl Gang. What an incredible organization. And I saw Alex interview Ashley Stiles who is our guest today and you're going to learn so much about the impact of development projects. Ashley Ashley is the CEO and founder of Tribe Development, a comprehensive real estate consulting and development firm which aims to develop better spaces and experiences for everyone. Ashley brings more than 15 years of experience in commercial real estate along Colorado's Front Range. During her career, she has developed more than a billion dollars in assets. You're going to hear how Ashley gathered input from the community when developing a new project. Her signature approach for development includes a focus on function and design along with considerations for the people who will use the finished result. She also speaks of forming partnerships and setting the terms at the beginning of the deal to allow for future changes. I can tell you all that I got a tremendous amount from this episode. I really like Ashley's approach. For many of you listening and maybe you've tried when going in for approvals for development, maybe it's a variance. Maybe the older school approach is to go in and ask for a lot more than you actually expect to get and then a negotiation ensues. I really appreciate Ashley's approach of reaching out to the community first finding out what they're looking for so you can address those concerns up front and then sail through the entitlement program. So I know you all are going to get a tremendous amount from this episode. As always, you can go to james nelson.com that's where you can find the show notes. Also for those of you who'd like to see the video of this, you can look at LinkedIn, Instagram, Twitter or my YouTube channel. You can find all these at James Nelson NYC where you can watch the video interview as well. And for those of you listening on podcast. I I've learned that Apple might have switched things up so if you don't mind hitting follow they they might have dropped you. I want to make sure you continue to get our shows that we are putting out on a weekly basis so really appreciate your tuning in. We're going to have a brief word from our sponsor and Alex and I will get right into that interview with Ashley Stiles. A Different Approach to Putting Our Clients First Avis and Young's Tri State Investment Sales Group sells multifamily office retail development and specialty sales throughout the New York metro area. As experienced thought leaders in our industry, our 35 member group is available to help you make informed investment decisions by advising you on your current holdings or identifying new opportunities in the marketplace. Our one unified team is built on an industry unique platform which promotes unparalleled collaboration and and teamwork. We share core values of hard work, integrity and expertise. We put our clients first providing tailor made strategies to achieve superior results. Please Visit us at aytristateinvestmentsales.com and follow us on Twitter, LinkedIn and Instagram amesnelsonnyc to learn more. Welcome everyone. So excited today and we have a new format. So yes, we have not two guests, we have one guest, Ashley Stiles who is the CEO and founder of Tribe Development, but Alexander Marolda who works with the Eva Sin Young Tri State Investment Sales Team is going to be a co host. Now I saw this dynamic duo, well it was actually along with an incredible panel at a Girl Gang event. And for those women out there listening, this is an organization that you are going to want to get involved with. I mean it was amazing. I've heard a lot about the group. This was the first time I was invited as a guest. Yes, I sat in the back row. I didn't ask any questions. But yes, it was an amazing turnout. A couple hundred women coming out sharing their their stories, their encouragement, empowering each other to do great things. And Ashley had traveled all the way out from Colorado to show up for the event. I just thought that was such an amazing thing. So Ashley graciously agreed to come speak on our show. So Ashley, welcome, thank you so much for joining us and would be great if you could just give a little background on Tribe Development and then we'd love to get into your story.

Thank you so much for having me. I'm happy to be here. This is really fun and the Girl Gang event was fantastic. So I do encourage other women in the New York area to get involved in that organization. So Tribe Development is a company. It's. We're obviously female owned where I'm also indigenous and so we're a native owned company and I founded the group about five years ago. Prior to that I had worked for multiple family offices as it relates to real estate development specifically and managed most recently a commercial and mixed use platform prior to starting this organization. So it's been a whirlwind of starting a startup towards the tail end of what was like a really significant boom in terms of real estate for the last 10 to 12 years. And now it's really been about how do you make sure that you set yourself up for success as we go forward in a tough capital environment. So you think that you are ready to go and launch and be on your own. And then you know, there's always really fun learning that happens along the way in navigating things like a pandemic that none of us navigated previously during this time. So I feel really fortunate that we have the projects that we do and that we're afforded some of the interesting opportunities that we are as this organization continues to evolve.

Alex, do you have a question that you'd like to kick things off?

Well, okay, so you said that you started off more on the family office side. Maybe you could tell us a little bit about the skills that you picked up there and how you and when you kind of thought you were ready to make that transition.

So I think that one of the beautiful things about so it was a smaller company when I started and we had like exponential growth while I was there. So when I first came into that organization we like developed every asset class under. So I was like the developer. And then as we grew I ended up with 14 people on my team, specifically on the commercial side. We started the industrial platform for that organization and then we all kind of like had product segmentation, right? So like there was a hospitality focus group, there was my team and then there was a multifamily team. And so part of that was because like we had grown so much and so quick that we had to specialize. We couldn't do all the things in every asset class. So with that is like as a, you know, a fast growing organization, it's all the things that you would expect, right? Like pretty significant growing pains. Pretty, you know, like we didn't have a lot of like policies and procedures in place to handle the growth that we experienced both from like a staff side as well as like a capital side. So that just required that you be incredibly nimble and you be Very creative about how to make sure that you advocate for your projects and you get them funded and you get them move forward. And so it was beautiful because you got to touch everything. So I highly suggest that you know, if people have an opportunity, they work in a smaller organization because it forces you to learn every aspect of the business as opposed to just like the finance side or just the legal side. Even if you are a focus in one of those areas, like one of my asset managers or one of my analysts knew everything that was happening in the projects because we were such a small, tight knit team. So I think it offers like really amazing exposure. That was like my last stop obviously. You know, I've been with like a couple of the private equity firms and things prior to that. And so I had really built kind of like, you know, my knowledge, my skill set, my network. I've been in this area for 24 years. So then it was kind of like, okay, I'm either going or I'm never going to go. So, so I took the leap and I went. But that was, it was definitely like a scary thing to do. I didn't leave with like a high net worth individual backing me. I didn't leave with one of our investors. And so everything we've done today from like a company standpoint on like the pre development side, which is the hardest thing to do for a developer, like just starting, we have funded ourselves. So because we've learned some things along the way so far we've been really fortunate that all of our projects are moving forward and we haven't had, we've had one project stall. And so you kind of, you know, you watch all of that sunk costs like never be recovered. But we're fortunate in the projects that we have in our pipeline that we feel that all of them right now will advance just a little bit of a slower pace than we're used to. But it's really kind of opened our eyes to the fact that you know, raising on a one off basis, like on a project by project basis is really challenging. And so we've just begun the process. We're launching a fund so it'll be our first fund to really give us like the speed that we think is going to be required. I think 2024 is going to be a really good year for real estate over opportunities and I want to make sure that we're, we're ready.

That's awesome and thank you so much for sharing about the leap, speaking to a lot of aspiring investors. You know, when I ask what's the number one thing holding you back. Lack of capital is usually at the very top where, you know, look, I'd love to do this. I've got the knowledge, I don't have the capital. So you know, surely as much as you, as you feel comfortable, of course. But when you mentioned, you know, I left, I was using my, I didn't have, you know, my own high net worth backer, you know, what was that like? And maybe you talk about, you know, signing that first deal and that pursuit costs where, you know, is this all you're reaching into your own pocket personally or is it the proverbial friends and family just trying to give our audience a sense of trying to do that first deal on your own and how you cobble it together.

So I'll tell you how I did it, which is also how not to do it. Okay, so they go hand in hand. No, I do not bring investors in on pre development. So the pre development spend. So you know, getting through your entitlements, getting to that first spot of being able to capitalize a project with a bank and with investors like everything up to that point is us, it's incredibly difficult. I would just share that. So, so yes, it's my money. I was able to structure an exit with my last office where we had a capital event on one of my projects that I was invested in. And that gave me the safety net. Right. That I needed, that I knew like, okay, I have enough. Not a ton of money, like I can't fund every project. I'm not a high net worth individual, you know, but I have enough money to know that like I'm going to be fine and I'm going to give this a shot and if it doesn't work out, I'll go get a job. Like that was what I thought the other side of this is. So before I was in development, I was on the design side of things. And so my background is in architecture. I graduated with a landscape architecture degree. And so I have been able to work on projects that potentially feel a little different. They're pretty high touch from a design side. That doesn't necessarily mean high cost, but they're really thoughtful in terms of the design that goes in behind them and that was attractive to other people. So when folks found out that I was leaving again, having a really strong network around you, being in a place for a long time and being active, you know, there was opportunities and I was offered quite a few jobs. When folks found out that I was going to leave my last office And I said, I'm not ready to be an employee, but how would I consult for you? And so I'll carve out some of my time and I'll give it to you. But like, I'm like a little ptsd. I can't come into another office. I don't think I really liked Corbin Ashley very much. So I consulted for a lot of people and honestly that is how I paid for all the pre development. It is really hard to split your time. So just as hard as it would be to like pay for everything out of your own pocket or raise money for pre development because it's so, so risky and a lot of people are so leery of pre development dollars. You know, it was, it's just as hard to like give half, if not more of my time to consulting on other people's projects to make the money to invest into my own projects. But that's how we do it. And so we still, we only consult for a couple of people now and they've become like really great clients. We've done a lot of projects together, so we're not actively like out there looking for like other really large consulting opportunities. Although when they come to us, we evaluate whether they're a good fit timing wise for us. But it was always meant to be like, this is how we're going to get to those first deals and then we'll be able to like flip the switch and it'll just be development.

So a follow up question to that. So when you said that you, you left, you didn't bring a high net worth individual with you, did you though? We had touched on this on our panel in the panel before ours at the Girl Gang event. And it also comes up in James's book, Just Building that team and having those resources around you, the people resources, we refer to them as like the board of directors. Did you have a group of people either with you or in mind before taking that step or was that sort of built, you know, while you were on your own consulting?

And definitely, I mean I had a great relationship with folks who had invested in my projects previously and they many, if not all had expressed interest in like, hey, let us know when you have your first deal. So I had a really great track record that I could lean on in terms of investors and a lot of those same people are in on our first deal. So we're capitalizing a project right now. We've got multiple deals in our pipeline, but only one that we're raising money for actively right now. And then I would say that from the consulting opportunities also opened up a different network of people that you know, I hadn't interacted with previously in the same way. So both things are true. So yes, to the fact that I didn't take an investor to help me launch the business, but I definitely kept in touch with all of my investors who had done projects with me previously to make sure that like I had a soft landing when it come it came to capital raises.

That's super cool.

But it's hard.

Well, yeah, no, and as Alexander mentioned and it is a premise of the book that this is a business about the people. So having the right people, the specialists, but also people who you can work well with is so essential. So Ashley, maybe talk a little bit about because Alex and I are transacting in New York City every single day. I mean, I don't know if it is the toughest market to transact in, in the world, but it's, you know, you show up, you're doing your diligence at your own risk. When you sign a contract, it's a 10% hard deposit. Properties are sold as is. Whereas, you know, someone looking to jump in the game. That's pretty scary to do right now. The good news is after you've acquired that property, you're buying, but then you're selling into the same market. So hopefully on the exit it's always going to be that cash buyer to take you out. But I, I would imagine in Colorado and with the nature of some of your developments, you know, just even by you saying, well, you know, I'm able to have, you know, some pursuit time diligence. Is that helpful in the way you structure your transactions that you're able to actually get exclusivity on that opportunity and then go and position it and make sure that you have everything teed up. So when you go out to raise the capital that you've got a fully baked project.

Yeah, I mean it's a huge part. It's a, it's a gigantic advantage. I would say that it is not always been that way. I mean there's definitely, you know, when we look at some of the really attractive markets where we're seeing like a lot of immigration. Right. Colorado is one of them. Right. We're a highly desirable place to live. We've got great quality of life. And so we're seeing a lot of people come here with that. And I would say like we spiked like crazy during COVID Right. Like so many people moving here in Texas. I would say the what we also saw, in addition to like people coming here was a really large number of REITs coming, which we had never really experienced in the, like, in that times, like quantity, I guess. Right. So it was, we're all sitting back watching what people are paying for projects and how fast they're closing on things. And we're like, this is wild. Like, this is not how we do it. You guys have overpaid. This is like never going to work. And so it's been really interesting to watch other people come in. And then what's been great is, you know, making friends with some of those folks and say, like, share with me. Like, how did you underwrite this? Like, what did that look like? Because we don't. We've typically never seen deals structured in that same way. So it was a learning opportunity for us. It made the market incredibly competitive as a small business. You know, like, I'm not necessarily going to be able to compete with some of the larger groups. And so I try to look for opportunities where like, maybe developers have like not moved into yet. So I really like areas that are like, we've got two really great universities. I really love both of our college cities. So one, because like, they're incredibly desirable now. We've got like some pretty famous coaches and it's driving a lot of attention to both of our universities. And so it allows for some development opportunity and some interest from an investor standpoint outside of our market. But I'm not competing against some of the larger groups. And so I try to like figure out, okay, well, where can I go that I can be highly competitive and set myself up for success. The other side of that is that I try to make sure, like for the project that we're working on right now, I've developed a relationship with the seller for a year prior to us being under contract. You don't always have that opportunity. But as you said, like, this is a real relationship business. It truly, truly is. A lot of people have tried to purchase this property from her and have been unsuccessful. And so I think part of it was that like, I didn't come in with a number. I didn't come in with like some crazy timelines. You know, I met with her, we had coffee for an hour, maybe like an hour and a half. And at the end of that she's like, I think that you should be working with me on this deal. Like, I think that this should be you. And so it was like an opportunity to like tell her my vision through like a relationship based conversation, not a transactional conversation to get it so that I could set us up to be successful and have a little bit of a Runway to try and put it together. And I think part of that is because of how I approached her. But, yeah, it's. It's hugely beneficial. But I think you've got to be a really good negotiator and know, like, these are my deadlines. This is how fast I think I can raise. This is how fast I think I can get a bank. I mean, to be fair, like, we had to ask for an extension because banks are taking a little bit longer now, so we had to ask for a little bit more time. And those are always tough conversations to have, especially when they're outside of your control. But just negotiate as much as you can.

Very helpful advice and a good thing for our listeners to think about when they're considering what market to choose and what kind of setup. And I love the aspect of the personal connection because again, if you're just competing in a blind bid where you're just one of, you know, 20 Lois that are coming in, especially when, like you said, if your competition or the big REITs, and they're going to look at a track record that's a mile long, that's really impressive and power to you that you recognize that you had to establish that personal relationship, that connection, and that. That's really, you know, a big part of the insider's edge, right, Is making that personal connection. So you're not competing with the rest of the free world.

That's right. Because you can't. I mean, if you're starting, you can't, right? So it's. You got to be thoughtful about that and you got to figure out, like, well, what's. What's the motivation, right? I mean, like, a lot of people have tried to purchase this. So, like, what has happened and why has it not worked out? And, you know, they did exactly what we would normally do. You, like, send in an loi, and then you're already negotiating from, like, somebody who has owned this property for a really long time, has an emotional connection to the property, has a lot of pride tied to the property, wants to see, like, a legacy, you know, like, realized beyond them. Like, it's emotional, like what we do, the built environment, you know, like, if there's family history tied to it, especially, you know, I think going with numbers is never really going to win unless you're like, you know, your number's crazy. Okay, so. And you don't want to be the one with the crazy. Number. But I think that always, you know, one of my. When I worked for a private equity group previously, the gentleman who I worked for built his, like, he's, he's got a pretty significant amount of net worth and had built it through buying distressed assets. And I would say that it was a completely different learning opportunity to have to go and try and buy like a generational piece of land, whether it be a farm or whatever it was, from somebody who was like the fourth or fifth generation and they're losing it. And how to approach people in that time of it not just being where they felt like you were, really, you know, like the big bad developer coming in to like buy it from them. It's taught me a lot about like how to lead with a little bit more emotional intelligence as it relates to deals. That's awesome.

I actually do have a follow up question. So you had said that, you know, with all of the influx of capital that's going into Colorado, you know, you really needed to start looking at deals that maybe these rates and beer groups weren't focused on. So that sounds easier than it is, I would think, right. To find a deal that actually works. Right. The numbers work and these big guys aren't competing for it. So. So how do you do that? Is it a lot of like on the ground? I mean, you're obviously there and in it. Is it just years of having built those relationships?

Yeah. So, I mean, so part of, you know, like what I'm doing that they would not do is sized. So now it's like a $60 million deal is as hard as a $150 million deal.

Right.

It takes the amount, same amount of work, which is why a lot of larger groups won't pursue those projects. What we had to be careful on is like what the margins look like to our investors. And so what we have to think about is like, okay, well, how do we capitalize it in a different way? How can we think about like to, you know, like leverage some of our relationships? What are some of the things that municipalities are looking for? Are there programs or participation pieces that we can leverage so that it brings down what the overall risk is to our investors or lowers what our capital stack needs to look like that maybe others wouldn't necessarily know out of the gate because they're not here? So we try to leverage those pieces. So again, it's our relationships, it's our real knowledge in terms of our market, and we do the same thing. So we're kind of like all in the West. So our Projects are, well, predominantly in Colorado. We look at Salt Lake, we look outside of where we are to other, like, communities. And. And. But again, like, it's all relationships that have taken us everywhere. So our projects in Salt Lake or our Salt Lake friends who have brought us into those deals, when we go into the mountain communities, same thing, but they're really desirable places to be. And then we just try to look at, you know, okay, well, what's the unit count? How do we be thoughtful? We do a lot of infill projects, and so that puts us in, like, a strategic position also because we've got great relationships with cities in terms of what they're looking for. We've got great relationships with planning departments. And so not to say that our projects easily make it through, but we pick the right team and we know how to get through it. We know how to navigate it because we've got a lot of institutional knowledge between my team as well as, like, my design partners.

So, Ashley, maybe you could expand a little bit on this community centric development. So, you know, look, being, I mean, being a good neighbor, building something that works for the community, obviously you need to get approvals and understanding that, that process and that you know how to approach it holistically. But at the end of the day, as a developer, you also have to make the numbers work. So how do you balance making a project economically feasible while also trying to deliver something that is going to be well received by the community?

A lot of times when we say, like, community based development, people immediately think that it's like, lower margins. And it's not like, it doesn't have to be, of course, like, sometimes it happens, but. So we treat our projects like all of them are going to be legacy projects, but they're like, our returns are really great. One of the goals that we have as an organization is that when we show up to planning, we do not have people there speaking in opposition of our project. That's tough in today's environment, especially with people who are, like, really resistant to change. Our landscape in Colorado is changing incredibly fast as we're like a really fast growing state. And so it's a hard thing to stay in front of sometimes when you have community members that are really fearful of that. So what we do that is, like, not required. So, like, yes, we do the planning process, of course, but we are really active on social media. We hold a lot more public engagement sessions than we are required to do. We do a lot of outreach to, like, our immediate neighbors when we're developing A project we utilize like some of our business community associations to get in front of people. And so then we understand like, well, what are the needs, especially if we're doing a mixed use project, you know, like what services are lacking, you know, what are people looking for in the community. And then just being able to respond to that in a public hearing is to say, you know, like what we heard from this meeting, right, that we're looking for XYZ in terms of what a tenancy could look like. And we do the real work to like make sure that we can try and find people that potentially match up, that match our pro forma, but also match what some of the community has asked for. And then I think, you know, we're really diligent, we are really high touch when it comes to design. So we're not putting things into communities that folks feel like are less than from a quality perspective. And then you make smart choices. You just have to keep making really, really smart choices. You know, you guys know, you're in New York, you're in a really dense place when as a pedestrian you do not realize anything as you are walking above a third story. And to be fair, it's only half of a third story. And so if you're thinking about like, well, how do we create something that's really compelling from a design perspective, like change materiality as you get up, right? Like nobody is going to understand it from the street level. Nobody is going to experience the building as like a whole at one time. And so you can make smart decisions on your ground plane about like, well, let's invest the dollars where people really feel them and then we can make different choices as we continue to go up and as our cities densify, you know, you're just going to see more and more of that where we just can't, nothing can. Like we can't afford all of the really nice material up to, you know, however many stories we're looking at. And so we try to do things like that that make a real difference. We also are just like really active in the communities, right? So we kind of know like the folks that are leading organizations in different associations so we can have conversations with them early about like, what are the things that could potentially kind of surprise us as we move through this process.

I've got to ask a follow up to this because this is really fascinating to me that, I mean the fact that no one shows up to protest your project. I mean, we always know there's going to be people for the community. It doesn't matter what you do, they want nothing. Not everything just stay exactly the same. So, and I got to share a quick story. When I first started in the business, one of our clients was looking to build a high rise on the middle of the block, which was probably not a great idea, but nonetheless, the founders of my company said, look, we need neighborhood support. Go up and speak in support of this project. And I got booed out of the room, which probably, I probably deserve. But that aside, again, what's amazing to me is that I feel like a lot of developers want to try to keep their plans as quiet as possible because the more the feeling is, the more you put out there, the more people can criticize. Or that's, that's one approach or the other is let me go in with something that's way higher. Let's shoot for something that is way beyond what we think is reasonable because we expect there's going to be a negotiation. So if I go in and ask for a 50 story building when the numbers work at 35, you know, the community is going to come back with 20, 25 and then we'll negotiate. Right. So. But it sounds like to me that you're saying, look, we're just inviting the community into the process, like right from the get go. But I got to believe even with that, you're going to have people who say like, Ashley, you know, thanks, but we don't want anything built in this site.

Yeah, I think so. So we had projects where nobody speaks in opposition, which is fantastic. And we have projects where people are NIMBYs, right. And they don't want anything. And so. But it is not so to your point. So here's one thing that I think we do horribly as developers. So to your point, we either like go in and we overshoot so that it looks like we negotiated to get back to what we wanted in the first place, or you show up with something and it's just like a lot of really pretty renderings. That's like what happens here a lot is that like your very first public meeting that you're required to do in the planning process. So it's been posted, people don't know what it is. They're freaking out. They don't know what's coming into their neighborhood. They show up to the meeting and you have renderings of something that is most likely more dense than what is currently there. Right. Because that's the only way things work right now. And people freak out and developers are like amazed because they're like, but it's beautiful. Like, look at this amazing thing we're going to bring to the community. So we don't do that. Like the first meeting we show up, we say, here's what's allowed by code, right? Like, this is the type of project, this is the zoning that's in place. Here's the height pieces that are allowed. You know, you tell us, you know, like, where have you seen other people go wrong? You know, again, like, what are some of the services you're looking for? If it's a mixed use project and we have commercial opportunity and then, you know, we take all of that feedback. And so the first time that they're seeing any renderings, we've already talked to people. Like, so our first planning meeting, we've already been out. So people know, they're not surprised, they're not getting like a surprise posting that a development is under review. And it's a huge game changer for how people approach you because then even if they get up and they have something to say, it's more about. We really appreciate that tribe came and met with us before this meeting. Here are some of the things that we express to them. We see that some of that is reflected also them planning and zoning. Loves to hear that.

Right.

That we've already done some due diligence. And here's some more things that we would love to have. A lot of times the comments that are being made are directed at the city. They're not comments about our project. The comments are about what are we doing about homelessness, how are we controlling traffic, how are we solving some of these other projects that my project is not going to solve. And everybody that sits up there from an approval perspective knows that that's not my place, right, to be answering any of those questions. Those are very city municipal questions. And so, but we, we've laid some really great foundational groundwork that we're going to listen. And so then people, you know, most of the time when you're feeling like you're getting a lot of that, like negative feedback, it's because people don't feel like they've been heard and their city is changing and they don't have a voice in it. And so we just try to like, get out in front of it as fast as we can.

Can you just actually expand a little bit more and just let. Where in the deal process do you do that, though? So do you already have control of the site? Are you still negotiating the site? So I would think not. I would think you would have Some control over it. But when do you spend time doing that and how do you know it's a good use of your time?

So we have one project that's actually just like down the street from our office. It's an infill project. It'll be just multifamily. So we had, we tied up the site. So but we were only like in our due diligence and we had an initial outreach meeting and we did two. Well, we got through the majority of our entitlements while we were still in due diligence, just to make sure, because, like, we needed a modification to allow us to get the density that we need to make the project work. And we didn't want to close without knowing that we could get there. So all of that obviously is like, you know, your risk, like your, you know, soft cost at risk. If you can't get the modification or if we got some pretty negative feedback from the community, we didn't. And so we were able to get both. So we did that fairly early in the process. So as soon as we had it under control, you know, we expressed to the seller, we're doing this, you know, this is part of what we need in order to close. And so they were fine with the way in which we represented the project that we were pursuing, acquiring the property. And this was our intended outcome once.

You have the preliminary approval. So now is when you go out and you're looking to raise outside capital. Now, what is your ideal capital partner? Are you looking for a co gp, someone who can join you side by side who will actually, you know, participate in the development? Are you looking for a limited partner, maybe talk about how debt plays into that? I mean, again, we know you can get very fancy with, you know, putting in, bringing in prep, equity, mezzanine. I mean, what is your ideal capital structure where everybody's interests are aligned?

Yeah, so I was just having a conversation about this this morning because we have one project, the one we're trying to cap, that is getting complicated and it was great. I talked to another developer friend and he was like, the harder we make it, the less good the deal is. So, like, we just keep it super simple. And we are, we're like fighting really hard for the project to stay incredibly simple and to not have to do, like, any clever mechanics as it relates to capital, because it is hard. It's hard to like follow that dollar through what your opportunity is, especially as an investor. You know, we're still small, we're building our balance sheets, so there are Projects like the infill project here, that will be multifamily, it's a really large project. So we brought in a code GP and so we're 50. 50. That's, you know, that project is probably a little too big for us to do on our own at this point. And so we love that.

Right?

It's you're on the hook for 50% of the soft cost instead of a hundred and then it's nice.

So Ashley, sorry, not, not to stop you, but so you have that 50, 50 code GP partner, is it then your partner, you brought the deal, clearly you teamed it up. They're bringing additional capital, expertise. But then do they bring their LP investors to the table or is it just the two of you and your debt? Is there any more?

So we're both bringing LP to the table. So that's how we're doing. So that's that one. So that's in a Code gp. The project we're raising for right now, we are not bringing in a partner. And so it's all LP money. You know, we look at just deal size and where our expertise lies and how what we have from a balance sheet that we can put up in terms of risk and that's how we judge the way in which we need to structure a project. I think that's the beautiful part about being smaller and being, you know, like where we are in terms of like the cycle of our company is that, you know, we are really creative in how we structure partnerships and opportunities so that we can do projects we don't have. Like this is our model and this is the only way we do a deal. It's like we'll explore anything and just.

A quick follow up on that and only if you feel comfortable sharing. I know it's a sensitive topic, but when you have that go cheap P and you're going to get financing so that you're doing construction, you're doing ground up. So you know, look, if you can still get non recourse financing, that's fantastic. But, but we know that typically there's guarantees. So how, how does that conversation go with the GO cogp, you know, are you looking to them with the bigger balance sheet to put the guarantees, are you both guaranteeing it? And then how does that conversation go?

So two things I think are really important. So I only will do a code GP with people that I really trust and that I know. And our business models are really aligned in terms of like this is how we do deals, this is how we treat our investors. Like, we have like, similar ways in which we manage our companies. And so I think that that's important to make sure that you have alignment and just like your everyday, like this is how we operate life so that, you know, like, okay, we're gonna, if we have to have hard conversations, we're both gonna probably approach it in a really similar manner. So one, I think that's important is making sure that you're aligned out of the gate when you pick a code gp. The other part is to like, make sure that you understand how you know you're gonna break up, right? So like, if it ends up not being a good partnership, you know, like seven, 10 years down the field whenever it is, could be three people come in and out of companies all the time and you're no longer aligned. You gotta know how you're gonna get out, right? And so I spent a lot of time having that conversation and that like actually documented within our JV agreements. So I think if you're gonna do it, make sure you know how you're getting out. A lot of times it's like, it's too rosy in the beginning and people don't think about how do we break up. So I think that's important. And then, you know, I'm very transparent about where we are from a business perspective. And so right now we're both signing guarantees. If one of those has to be larger based on balance sheets, then we have that conversation early and you find a partner who's willing to do that and then maybe they get a larger portion of, you know, the promote or they get a fee as it relates to, you know, the size of guarantee that they provide. And so we make sure that we try to structure that in a really fair way. And. But it's transparency, right? It's like don't say you can do something you can't do and you know, find somebody who's willing to work with you as you build your business. Like everybody's been there in development and so they understand that. And you just gotta find somebody who's interested in the fact that you can source an opportunity for them that they wouldn't otherwise have.

Wow. No, really appreciate your sharing that. And look, at this point We've done over 180 interviews and everybody likes to talk about the good news scenario and when there's plenty of profits and everything go around. But really appreciate that you're talking about that. You have to also allow for not even just the downside if things don't go well. But look, I Mean you might have a different time frame or outlook than your, your capital partner. And it might be, look, you want the ability to exit the deal in a certain time frame. And so I think addressing that upfront where okay, hey, what happens if one of us wants to sell and the other end wants to stay? That's a healthy conversation to have up front and you know, to talk about it if there's cost overruns. Okay, how does this work? Right. So really appreciate your sharing that.

Yeah. And without fail, I mean I've watched it go badly. So I think that that's part of it, right. Is I think we've, we all know of a project where partners didn't agree and then it forced a sale of something that, you know, people didn't want to sell and, or it really like ruined a long term relationship between two entities. And, and so I think it's, it's just prudent to think about those things because you know, especially most of the time when I'm partnering with another cogp, they're in a different place in terms of like the life cycle of their business than I am. And they're motivated, like their motivations can change and mine change. Right. As we continue to grow this organization. So I think it's just smart and it's nice to talk about those things when everyone gets along. It's really bad to try and talk about that stuff when you are not aligned. And so it's so much easier in the beginning. They're awkward conversations for sure, but it's so much easier to come to something that feels really fair when, in the beginning, when everyone's excited because there's a new deal and there's a new partnership to be had.

Maybe you could also talk about how you, when, when you are raising money, how, how, how you get the word out there and you know, make people aware of the project, just that process in general.

So I say it's like you're just dialing for dollars like every day. I would say you, you know people in your network that are like very well connected people. So even if they're not like potentially your investor, it's like you get it in front of them and you just have to ask, right? Like do you have anyone that you can share this project with? Or it's like, you know, there's, there's like particular individuals within your network that maybe they're manage like their fund managers or you know, they manage, you know, high net worth individuals estates and it's like get it in front of Them as fast as you can and, and just be willing to like make the ask of getting it. Asking them to help you with their network, especially if you really believe in the project and they see that it's a good opportunity and you think that it's, I mean, a warm introduction is so much better than trying to go out to folks cold. So I think on a project basis that's how I do it. I've got, you know, great, like people that have invested in projects that then get me to some of their friends. You know, I will say if my, if my cpa, my accounting firm watches this, I can't even tell you how many people they have brought to like deals of mine. So I'm very grateful for them. Although I don't want them to increase their fees. You know, it's just, it's that network that you develop over time. We all have a really great network, but you have to just not be afraid to ask. I would say that, you know, the piece now that is different because I've never raised for a fund before like my past organizations like the Private Equity Group. It was all the private equity funds money we didn't take outside money. The family office I worked for, we did all friends and family. We took no institutional money. So it's great because that helped me develop like a pretty significant network of investors. But this is different. It's different for, I would say there's a handful of funds in Colorado that's, that are real estate specific today. I have yet to be able to find a single fund that is specific to women in real estate, which is mind blowing that we can't find one. But also like just furthers the need that we should have one. And so that's different. That's like going out to different folks. That's different conversations. That's like finding fun to funds. That's like going to different people. I like going to books that are not in real estate as we're talking about fund, you know, opportunities and investment. But I think it's. You just like shoot really high and you just talk to every single person you possibly can. So. And go to like every event and make sure everyone when they're leaving knows.

That you have a deal, you know, no question. And we can definitely relate from the, the brokerage side. We, you know, Alex says all about making calls whether or not people are interested or not. Yes. And we'll, we'll talk offline because there are some funds that I know of that are now I don't know if Dedicated for women, but, but again, looking, you know, for emerging sponsors. And again, so there are, there is capital out there for it. And then also, I mean, I really, since hearing you speak and following you on social media, you know, you put out incredible content just to make people aware of the disparity when you look at, and I know my friend Beth Azure, I don't know if you follow her, she puts out some great content as well about, you know, trying to inspire women to invest. And her statistic, I don't know, it's, it's Beth's research, not mine, but it's something in the single digits when looking at the percentage of real estate owned by women and just, you know, showing, look, this is possible. So whether you're, you're male, female, listening to this, you're going to get, I hope you're taking lots of notes. There's, there's a lot, you know, everything that Ashley is saying, really so many good things and lessons here, but especially for the women to see, okay, look, this is someone who's gone out and done it on their own is really fantastic. So, you know, Alex, with, with, with a couple minutes left, and I don't know if there's any other questions that, that, that you had on your mind. I certainly have a few, but just this is, we start to wind things down.

No, go for it. If you have, you have them on.

Your mind, go for it.

James? Well, I mean, look, Ashley, I think for one thing, you know, would be advice for someone getting started. And does it make sense to go work for a big shop and then try to go at their own work for more entrepreneurial shop like yours? So the question would be how would you advise someone get into the business?

So I did both and, and valuable learning from both. I would say, you know, like, if you really think that you are, you're crazy and you want to be a developer, then I think that the smaller groups, you will learn more, faster because you're required to do more than one thing and you get access to owners and to senior leadership easier. Maybe not always the case, but usually it's easier to have access to the senior people within the company because you're smaller. So there's pros and cons to that. There's, you know, some cons related to the fact that you might not have any, like, policies and procedures in place. There might not be a lot of organizational structure, which can be like, frustrating depending on how you like to manage your day and how comfortable you are going into something that you don't know. So I think that you have to kind of know, like, well, how do I like to operate? Am I a structure person? You know, do I really like to make sure that, you know, I kind of understand the parameters of what's being asked of me or you know, like, are you okay with a lot of ambiguity? So I think that that's kind of like how you could divide, deciding like which route you go. Neither is like the best I think, you know, you just have to like pick because you'll learn in either. And then I think, you know the advice. I wish that I would have trusted myself a little bit more. When I went out. I had the idea that I should start a fund from the day I left. And I didn't do it because so many people were like, oh, don't do it. You know, like you can raise on a one off basis. Funds are hard and you know, you gotta start having a pipeline the day you take that money. And it's like we've had a pipeline since the day I left and it's been, you know, like just a grind to try and finance. And so I think that would be the one thing that I would say is like, you know what your skill sets are and you know, I was talking to somebody the other day and they're like, no, half the money go get the pipeline. Like that's the way you should do it. Don't have the pipeline and then be scrambling to find money and, and you never know what environment you're going to be in. This is a really great example where like equity is, I don't want to say easy. It's easier than bank debt to find right now, but bank debt is obviously very important like component to the capital stack. So I wish that we would have started our fund earlier and that I would have just known that that was the right thing for me to do. Despite that that was not what some of my other peers did. And so listen to yourself in that regard.

It's great advice. And for the more experienced investors out there, maybe someone who's been doing this a very long time and they're maybe feeling like, wow, the world is kind of passing me by. I'm seeing how, you know, newer emerging operators are doing it. You know, what would you say? You know, what are the one or two things that you do that really separate you? I mean, for lack of a better word from the competition. What, you know, what, what gives you that insider's edge?

So I think you know, when on the design side of things, when I was still in that world. I, like, cut my teeth on hospitality projects. And so that was, like, when people were really understanding what experiential, like, development was before we started talking about that. So hotels have always created an experience, and so I think that I was able to apply that to projects well before, you know, like, whether they were in hospitality or not. So I think understanding the importance of a brand, like a brand is not a name and a logo. Like a brand is who you are and it's who you serve. Right. It's reflective of those things. So really making sure that you have that understood so that every decision you make is being placed through that filter is something that we don't. We start. That is like, where we start. We start talking about a project, we kind of understand what it is. You know, it'll shock lots of people. I don't start with a pro forma, so I start with like, okay, well, who are we going to be? What does it look like? What does it feel like? Because all of that's going to tell me where I need to be on a financial side. And so that piece of the storytelling, I think, is really important, and I think it comes through in our projects. People really resonate with it. They always know that we're going to come with something that feels different than everybody else. And so I think that that's really our biggest competitive advantage. Like, we do not pay at lip service. It is how we start.

Love it. Well, Ashley, this was amazing. Thank you so much for joining us. It was just a real treat, you know, to. Heard you speak before and now come in on the show and for you to share all. All your experience? And again, I know our audience is going to get so much out of this. So where is the best way for people to find out more about what you're doing and if they'd like to connect with you?

So, as you mentioned, we're highly active on Instagram, so you can reach us, excuse me, anytime on Instagram. We're always there. Or you can hop on our website and there's a really easy link to connect to me. And I respond to, like, every email every day, so love it. It's. It's. It's a tough. It's a tough one sometimes. But no email unread. And thank you for coming to a Girl Gang event. I commend you. We cannot do this without men. Like, we all need to be doing this together. And so I really appreciate you coming to an event that maybe you knew that you were not going to be in like a huge amount of company with other men. Okay.

It was fantastic and it was awesome to see Alex up on stage. And Alex, thank you so much for everything. Not only you do it with Ravis and Young, but also it was so awesome to have you as a co host for this. So thank you.

Thank you so much.

Wonderful. And thank you once again for everybody who is listening. If you like this episode, share it with a friend. That that is how we're getting the message out there. Again, the whole purpose of the show is to help you gain the insider's edge to real estate investing so you can gain the advantage outperform the market. And you can go to james nelson.com that's where you can find the show notes to this episode. You can also find out how to connect with Ashley. There's also really helpful white papers videos. I built the site for you to help you succeed. So until next week, thank you as always and thank you all.

Thank you for listening to the Insider's Edge to Real Estate Investing. We appreciate your subscribing and sharing with your friends. If you haven't already, please connect with James at James Nelson NYC on LinkedIn, Instagram and Twitter. Please also visit jamesnelson.com where you can find the show notes and other episodes along with an exclusive video series and other helpful resources so you can gain the insider's edge to real estate investing. Until next week.